Balancing act: Agreeing energy policy across the EU

By Lorna Sharpe

Published Monday, February 10, 2014

Lorna Sharpe looks at proposed European energy targets.

The European Commission has triggered a new debate on energy and climate with the publication on 22 January of a policy document that would set an EU-wide renewable energy target of at least 27 per cent by 2030, with greenhouse gas (GHG) emissions to be reduced to 40 per cent below the 1990 level. Green lobbyists and groups with a commercial interest in renewable energy immediately attacked the ‘2030 framework’ for a lack of ambition, while other commentators noted a pragmatic recognition of economic considerations and welcomed the prospect of regulatory certainty for investors.

In an official statement, the commission said the framework “aims to drive continued progress towards a low-carbon economy and a competitive and secure energy system that ensures affordable energy for all consumers, increases the security of the EU’s energy supplies, reduces our dependence on energy imports and creates new opportunities for growth and jobs, by taking into account potential price impacts on the longer term.”

The EU currently has a climate and energy objective to reduce GHG emissions by 80-95 per cent below 1990 levels by 2050, with three “20 per cent by 2020” targets for GHG reductions, renewable energy use and energy savings. The new framework covers the following decade and constitutes the next step towards reaching the 2050 goal.

As well as proposing binding targets on GHGs and renewables, the framework addresses energy efficiency, reform of the EU emissions trading system (EU ETS), “competitive, affordable and secure” energy and a new governance system.

An accompanying report on energy prices and costs in Europe suggests that the rising prices can be partly mitigated by ensuring cost-effective energy and climate policies, competitive energy markets and improved energy efficiency.

However, the proposals will have to be debated by the European Council and the European Parliament before they can be adopted, and Member States will have to draw up their own national plans.

The parliament has already fired a warning shot, with MEPs voting on 5 February for not only a 40 per cent cut in emissions but also a 30 per cent target for total final energy consumption to come from renewable energy sources and a 40 per cent target for energy efficiency, all to be binding and implemented through individual national targets.

“If we want to reduce our energy imports we have to produce more in Europe, by making better and more efficient use of our resources,” said Anne Delvaux, the co-rapporteur for the parliament’s environment committee. “A broad energy mix with greater energy efficiency is the best option to reduce greenhouse gas emissions, to encourage new technologies and innovation, create jobs, and change our economies into greener economies. This is why we need three binding objectives.”

Opinion is divided, though. Konrad Szymaski, co-rapporteur from the industry committee, withdrew his name from the report that was adopted. “This result is not satisfactory,” he said. “We are promising ourselves, Europeans and European industry, that this new climate policy would be realistic, flexible and cost-efficient. However, if we double the emission reduction target after 2020, it is a road to reduce the competitiveness of European industry.”

The UK had lobbied against binding renewables targets either for individual states or EU-wide, arguing for less prescriptive ways to cut carbon emissions.

Energy and climate-change secretary Edward Davey said the 40 per cent GHG cut was a good start. “Yet Britain has been clear that Europe must be ready to adopt a 50 per cent target if the rest of the world is prepared to sign an ambitious global climate deal in 2015,” he added.

“It’s good news that the Commission has listened to the UK argument that countries must be allowed to decarbonise in the cheapest way possible,” Davey continued. “However, the UK remains concerned about any renewables target, especially as the debate within Parliament and the British green movement has moved on to technology-neutral options like a decarbonisation target as the most cost-effective and practical way of fighting climate change.”

Roger Kemp, a member of the IET’s Energy Policy Panel, welcomed the investment certainty the proposals provided.

“While we already have our own UK carbon reduction and renewables targets, for 2020 and 2050, the new EU targets are useful as they put a peg in the ground for what we want to achieve in the interim between the two UK target dates. It should help us - and the other EU nations - to justify investing money in carbon reduction measures and technologies,” he said.

“The lowest cost, but not always the easiest, carbon savings come from avoiding energy use and using energy more efficiently. Perhaps this change will rebalance policy more in this direction.”